Plans for Sparrows Point LNG terminal scrapped

An energy company that wanted to build a terminal in Sparrows Point to import liquefied natural gas and an 88-mile pipeline into Pennsylvania has scrapped those plans after a seven-year fight over safety and environmental concerns.

Arlington, Va.-based AES Corp. told the Federal Energy Regulatory Commission in a brief motion that it "has decided to no longer pursue" the project. The company cited no reasons and did not respond to a phone call and email seeking comment Monday.

The terminal and pipeline drew stiff opposition from residents, local politicians, state leaders and members of Congress. Though AES won approval from the Federal Energy Commission to proceed, it failed to get a needed state certification to dredge the waters around the former Bethlehem Steel shipyard to make way for big tankers.

AES appealed the decision in federal court but lost that battle four years ago. The project also faced a court challenge from opponents, who filed suit to have the Federal Energy Commission's approval overturned.

"We figured they must be dormant and just waiting for the right time to strike back, but what you're telling me, that's the best news I've heard," said Guido Guarnaccia Sr., an Edgemere resident and founding member of the LNG Opposition Team. "Good riddance."

AES is an electricity powerhouse with about $18 billion in annual revenue. It owns power plants, distribution and utilities in 23 countries and employs about 25,000 people, according to its website.

On top of all the legal wrangling over the Sparrows Point terminal, the market for natural gas has changed dramatically since the proposed project was announced in January 2006, making the import business less attractive. The boom in domestic shale gas production — prompted by hydraulic fracturing, or "fracking" — helped drive prices down from about $7 per million British thermal units at the beginning of 2006 to about $3.50 today.

The nation's net imports of natural gas dropped 23 percent last year from the year before, according to the U.S. Energy Information Administration. Much of what the country does import comes from Canada via pipeline rather than on tankers headed to terminals, the agency said.

Russell S. Donnelly, an Edgemere resident who leads the LNG Opposition Team, figures these market forces played a role in AES's decision. But the water-quality certification was the big hurdle, he said.

He's sure the terminal would have been built years ago if residents hadn't objected.

"We held their feet to the fire," he said. "We were prepared to hang on and fight if it took the next hundred years."

Residents worried about the potential for explosions and raised concerns that the terminal and incoming tankers could be terrorist targets. Robert L. Ehrlich Jr. opposed the project as governor, and Gov. Martin O'Malley called it "a threat to our homeland security."

Plans to dredge near the terminal as part of that project also met with objections. The waters and sediment near Sparrows Point are contaminated with decades of toxic chemicals from steelmaking there.

Nearly a year after being acquired by rival Men's Wearhouse in a contentious takeover struggle, Jos. A. Bank Clothiers will lay off 122 employees at the company's corporate headquarters in Hampstead, a company spokesman said Monday.